|(a) Applicability. The comprehensive process described
under this section must be used for any specific deliverable contract
that is $1 million or more in value and is not subject to §9.35
of this subchapter (relating to Federal Process).
(b) Administrative qualification.
(1) Administrative qualification is a process used
by the department to verify that a provider performing engineering
and design related services has an indirect cost rate that meets department
requirements. Except as provided by paragraph (8) of this subsection,
to compete for a contract under this section a provider performing
engineering and design related services either must be administratively
qualified or must accept an indirect cost rate under paragraph (7)
of this subsection.
(2) Factors in determining administrative qualification.
(A) A provider may demonstrate administrative qualification
by an audit or by self-certification.
(i) An audit may be performed by an independent certified
public accountant (CPA), an agency of the federal government, another
state transportation agency, or a local transit agency. An audit performed
by an independent CPA must be conducted in accordance with the current
versions of 48 C.F.R. Part 31, the Generally Accepted Government Auditing
Standards (GAGAS), and the American Association of State Highway and
Transportation Officials (AASHTO) Uniform Audit and Accounting Guide.
The provider must provide the department with unrestricted access
to the audit work papers, records, and other information as requested
by the department.
(ii) Self-certification may be conducted by the provider
and must include a cost report and an internal controls report. The
self-certified cost report must comply with the current versions of
48 C.F.R. Part 31, the GAGAS, and the AASHTO Uniform Audit and Accounting
Guide. The self-certified internal control report must certify the
provider has internal controls in place within its organization. Both
the cost report and the internal control report must be signed by
a company officer and notarized.
(B) The audit or self-certification shall be based
on the provider's fiscal year. The indirect cost rate, as approved
by the department, shall become effective six months after the end
of the provider's fiscal year, or immediately if filed more than six
months after the end of the provider's fiscal year. It shall be effective
no more than twelve months and shall expire eighteen months after
the end of the fiscal year upon which it is based.
(C) A provider must submit on an annual basis:
(i) a cognizant letter of concurrence issued by a state
transportation agency in accordance with the AASHTO Uniform Audit
and Accounting Guide; or
(ii) a compensation analysis for all executives and
employees in accordance with the AASHTO Uniform Audit and Accounting
Guide for which the provider may use either the National Compensation
Matrix or surveys as prescribed in the AASHTO Uniform Audit and Accounting
(D) The department may audit the indirect cost rate
of a provider under contract with, or seeking to do business with,
the department. These audits will be conducted in accordance with
the criteria outlined in this subsection.
(E) A provider must submit a signed Certification of
Final Indirect Costs with the audit report or self-certification.
The certification must follow the requirements of the Federal Highway
(3) Submittal and review process for administrative
(A) A provider must submit its administrative qualification
information to the department in accordance with the instructions
on the department's website.
(B) Upon review of an audit report or self-certification
received from a provider, the department may request additional information
from the provider. If the submittal is not complete and accurate,
the department will return it to the provider for correction. The
provider shall submit the additional information or the corrected
administrative qualification submittal within 30 days after the day
that it receives the department’s request. If the information
is not received within the 30-day period, the department will reject
and not process the administrative qualification submittal.
(C) If an administrative qualification submittal is
rejected under subparagraph (B) of this paragraph, the provider may
refile a corrected audit report or self-certification and shall include
any previously requested information. The provider may not refile
earlier than 90 days after the day that the department sends the notice
rejecting the submittal.
(D) The department will make a good faith effort to
complete the administrative qualification review process within 60
days after the day that it receives a complete and accurate audit
report or self-certification.
(4) Administrative qualification is applicable only
to the incorporated business entity upon which the indirect cost rate
is based and does not extend to a subsidiary, affiliate, or parent
of the incorporated entity, except as provided by this paragraph.
A corporation may administratively qualify a business segment of the
corporation if the business segment is not limited to a geographical
area that is less than the entire state of Texas and if the corporation
is able to demonstrate and justify the allocation of costs between
the business segment and other corporate operations. If a corporate
business segment is administratively qualified, the resulting indirect
cost rate is not applicable to staff not employed by the business
(5) The department will use a selected firm's indirect
cost rate information in negotiations under §9.40 of this subchapter
(relating to Negotiations).
(6) The department will not provide a firm's administrative
qualification information to the department’s staff conducting
negotiations or the consultant selection team before the selection
of that firm.
(7) Providers not administratively qualified. The department
may contract with a prime provider or allow the use of a subprovider
that is not administratively qualified if:
(A) the provider has been in operation, as currently
organized, for less than one fiscal year and the provider accepts
an indirect cost rate developed by the department; or
(B) on request by the department during the selection
process, the prime provider provides written certification that the
prime provider or subprovider, as applicable, does not have an indirect
cost rate audit and will accept an indirect cost rate developed by
(8) Exemptions to administrative qualification.
(A) A non-engineering firm is exempt from the administrative
qualification requirement of this section.
(B) A provider performing a service under standard
work category 18.2.1, subsurface utilities engineering, or any of
the following work groups, as listed on the department's precertification
website, is exempted from administrative qualification, to the extent
of the service being performed:
(i) Group 6, bridge inspection;
(ii) Group 12, materials inspection and testing;
(iii) Group 14, geotechnical services;
(iv) Group 15, surveying and mapping; and
(v) Group 16, architecture.
(C) The department may exempt services other than those
indicated in subparagraph (B) of this paragraph on a case-by-case
basis. Any request for an exemption must be received by the department
by the closing date of the solicitation.
(c) Consultant selection team (CST).
(1) The department shall use a CST in selecting providers
under this section.
(2) The CST shall be composed of at least three department
(3) At least one CST member must be a professional
engineer, for engineering contracts; a registered architect, for architectural
contracts; and either a professional engineer or registered professional
land surveyor, for surveying contracts.
(4) If a CST member leaves the CST during the selection
process, the process may continue with the remaining members, subject
to paragraph (3) of this subsection.
(d) Request for qualifications (RFQ). Not fewer than
14 calendar days before the solicitation closing date, the department
will post on a web-based bulletin board an RFQ providing the contract
information and specifying the requirements for preparing and submitting
a statement of qualification.
(e) Statement of qualification (SOQ). To be considered,
an SOQ must comply with the requirements specified in the RFQ.
(1) An individual may be proposed as a replacement
for the prime provider project manager prior to the department's notification
of firms short-listed for an interview or, if an interview is not
required, prior to selection.
(2) An individual may be proposed as a replacement
for a task leader prior to contract execution.
(3) A proposed replacement for the prime provider project
manager must be an employee of the prime provider. A proposed replacement
for a task leader must be an employee of the prime provider or its
subprovider. A proposed replacement for either position must satisfy
the applicable precertification and non-listed category requirements.
(g) SOQ screening and evaluation.
(1) The department may disqualify an SOQ if the department
has knowledge that a firm on the project team or an employee of a
firm on the project team is the subject of a final administrative
or judicial determination that the firm or employee has violated a
statute or rule of a state licensing entity related to occupational
or professional conduct.
(2) If an SOQ is not disqualified under paragraph (1)
of this subsection, the CST will screen the SOQ to determine whether
it complies with the requirements specified in the RFQ. Each SOQ that
meets these requirements will be considered responsive to the RFQ
(3) The CST will evaluate the responsive SOQ according
to the evaluation criteria detailed in the RFQ based on factors the
department has identified as most likely to result in the selection
of the most qualified provider.
(h) Short list. The short list will consist of the
most qualified providers, as indicated by the SOQ scores.
(1) For single contract selections, the minimum number
of short-listed prime providers is three, unless fewer than three
prime providers submitted a responsive SOQ.
(2) For multiple contract selections, the minimum number
of short-listed prime providers is the number of desired contracts
plus three, unless fewer than the desired number of prime providers
submitted a responsive SOQ.
(A) The department will notify each prime provider
that submitted an SOQ whether it was short-listed.
(B) The department will notify each short-listed prime
provider whether a short list meeting will be held.
(i) Short list evaluation.
(1) Interviews. The department will evaluate the short-listed
providers through interviews. The department will issue an Interview
and Contract Guide (ICG) to each short-listed prime provider. The
ICG will provide contract information and specify the requirements
for the interview.
(2) Short list evaluation criteria. The CST will evaluate
the interviews according to the criteria specified in the ICG, including
the prime provider's past performance scores in the Consultant Certification
Information System database reflecting less than satisfactory performance.
(1) Basis of final selection. The CST will select the
best qualified provider, as indicated by the short list scores.
(2) Tie scores. The PEPS Division Director will break
a tie using the following method.
(A) The first tie breaker will be the scores for the
interview criterion with the highest RIF.
(B) The remaining interview criteria shall be compared
in the order of decreasing RIF until the tie is broken.
(C) If the providers have identical scores on all of
the interview criteria, the provider will be chosen by random selection.
(3) Notification. The department will:
(A) provide written notification to the prime provider
selected for contract negotiation and arrange a meeting to begin contract
(B) provide written notification to each short-listed
prime provider that was not selected, notifying the provider of the
(C) publish the short list and the selected provider
on a web-based bulletin board.
(4) Appeal. A provider may file a written appeal concerning
the selection process with the executive director or the executive
director's designee as provided under §9.7 of this chapter (relating
to Protest of Contract Practices or Procedures).
|Source Note: The provisions of this §9.34 adopted to be effective February 21, 2013, 38 TexReg 994; amended to be effective October 17, 2013, 38 TexReg 7122; amended to be effective April 16, 2015, 40 TexReg 2098; amended to be effective July 20, 2016, 41 TexReg 5248; amended to be effective February 15, 2017, 42 TexReg 569